BUSI 4502 Lecture Notes - Lecture 11: Money Market Fund, Mutual Fund, High-Yield Debt
30 Aug 2018
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Document Summary
It is well known that when it comes to predicting future performance of mutual funds, past performance is required. This shows that majority of the investors use active management and act based on past performance. This questions if past performance indicator can accurately predict future price. Previous studies had investigated whether mutual funds, on average, outperform the market a whether the performance of the best managers is statistically significant. Those studies, however, do not address the question of persistence of performance. Studies of performance persistence contradict each other and have no consistent conclusion. Hence, the main purpose of this study is to determine the persistence of mutual fund performance using style analysis to monitor performance. The sample data is the u. s. active equity and fixed income mutual funds include in both the. The 300 equity funds included three convertible bond funds. The sample period is from 1983 to 1993.
